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Weekly Market Wrap - 07 September 2018

Market continues losing streak to start the new month                                               

The market closed out the week in the red, shedding 21bps to take the ASI to a ytd loss of 11%. Market breadth was broadly negative throughout the week but narrowed in the last session. Nonetheless, losses persisted across heavyweights in the Banking (d/d: -62bps; w/w:-235bps) and Industrial Goods (d/d:-44bps; w/w:-186bps) sectors. Major culprits here were DANGCEM (-219bps w/w), WAPCO (-213bps w/w), GUARANTY (-278bps w/w) and ACCESS (-474bps w/w). Meanwhile, the Oil and Gas sector (d/d: -18bps) had a quiet session on Friday, but was the worst performer for the week (w/w: -368bps) following a significant decline in SEPLAT (w/w: -723bps). Though posting a mild recovery to close the week, the Consumer Goods  sector lost 275bps w/w as a result of poor showings from NB (w/w: -511bps), PZ (w/w: -10.00%) and GUINNESS (w/w: -737bps) through the week.                                                  

Stock Watch: WAPCO hit a nine-year low of ₦23.00 today. The stock has lost 48% of its value ytd and is significantly underperforming in the Industrial Goods sector (ytd: -17%).                                                      

FI market closes bearish after multiple OMO auctions                                                  

"Amid an aggregate maturity of ₦295 billion, the CBN mopped up ₦499 billion across three OMO auctions during the week. That said, system liquidity remained buoyant at c.₦349 billion and the interbank call rate moderated 17bps to 2.83% at week close. The fixed income market traded bearish on Friday as investors reacted to higher stop rates at Thursday’s OMO auction. Yields in the T-bills space advanced 73bps (+6bps w/w) with notable advances on the 34DTM (+156bps to 12.34%) and 62DTM (+167bps to 12.41%) bills. Likewise, bond yields rose rose 17bps d/d and 26bps w/w. Sell pressure was concentrated on the mid-dated maturities as yields on the 14.50% FGN JUL 2021 and 16.39% FGN JAN 2022 bonds rose 38bps and 88bps to settle at 15.36% and 15.08% respectively.                         

The CBN continued its intervention in the Foreign Currency market this week, injecting $210 million at the inter-bank foreign exchange on Tuesday. Amid this the naira depreciated ₦0.14 w/w at the I&E FX Window to settle at ₦362.78 against the dollar while depreciating ₦0.50 to ₦359.50 in the parallel market.